RESTRICTED  WORLD  TRADE  
ORGANIZATION  WT/TPR/S/213 
18 February 2009  
 
(09-0737) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
FIJI 
 
  
 
This report, prepared for the second Trad e Policy Review of Fiji, has been drawn 
up by the WTO Secretariat on its own responsibility.  The Secretariat has, as 
required by the Agreement establishing  the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Fiji on its trade policies and practices. 
 
Any technical questions arising from this report may be addressed to 
Michael Daly (Tel:  022 739 5077). 
 
Document WT/TPR/G/213 contains the policy statement submitted by Fiji. 
 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
 session of the meeting of the Trade Policy Review Body on Fiji. Fiji WT/TPR/S/213 
 Page iii 
 
 
 CONTENTS 
    Page 
SUMMARY OBSERVATIONS vii 
 (1) E CONOMIC ENVIRONMENT  vii 
 (2) I NSTITUTIONAL FRAMEWORK  viii 
 (3) T RADE POLICY INSTRUMENTS  x 
 (4) S ECTORAL TRADE POLICIES  xii 
 (5) T RADE POLICY AND TRADING PARTNERS  xiv 
I. ECONOMIC ENVIRONMENT 1 
 (1) I NTRODUCTION  1 
 (2) R ECENT ECONOMIC DEVELOPMENTS  3 
 (i) Macroeconomic performance 3 
 (ii) Macroeconomic policies and targets 3  (iii) Balance of payments 10 
 (3) M
AJOR STRUCTURAL POLICY DEVELOPMENTS  11 
 (i) Tax reforms 11  (ii) Privatization and reform  of state-owned enterprises 12 
 (iii) Governance, and business environment 12 
 (iv) Capital market 13  (v) Labour market 14 
 (vi) Land reforms 14 
 (4) D
EVELOPMENTS IN TRADE  14 
 (i) Merchandise trade 14 
 (ii) Trade in services 15 
 (5) D EVELOPMENTS IN FOREIGN DIRECT INVESTMENT  18 
 (6) O UTLOOK  18 
II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 19 
 (1) O VERVIEW  19 
 (2) G ENERAL CONSTITUTIONAL AND INSTITUTIONAL FRAMEWORK  20 
 (3) S TRUCTURE OF TRADE POLICY FORMULATION  22 
 (i) Executive branch es of government 22 
 (ii) Advisory, planning, and other bodies 22 
 (4) T RADE POLICY OBJECTIVES  24 
 (5) T RADE LAWS AND REGULATIONS  25 
 (6) T RADE AGREEMENTS AND ARRANGEMENTS  26 
 (i) Fiji and the WTO 26  (ii) Preferential, regional, and bilateral arrangements 28 
 (7) F
OREIGN INVESTMENT REGIME  37 
 (i) Overview 37  (ii) Restrictions on foreign investment 38 
 (iii) Incentives 40 
 (iv) International agreements 41 WT/TPR/S/213 Trade Policy Review 
Page iv 
 
 
     Page 
 (8) A ID FOR TRADE  42 
III. TRADE POLICIES AND PRACTICES BY MEASURE  43 
 (1) I NTRODUCTION  43 
 (2) M EASURES DIRECTLY AFFECTING IMPORTS  44 
 (i) Customs procedures 44 
 (ii) Tariffs 49  (iii) Non-tariff border measures 61 
 (iv) Local-content scheme 64 
 (v) Contingency measures 64  (vi) Government procurement 65 
 (3) M
EASURES DIRECTLY AFFECTING EXPORTS  66 
 (i) Registration and documentation procedures 66  (ii) Export taxes, charges, and levies 66 
 (iii) Export prohibitions, re strictions, and licensing 67 
 (iv) Export assistance 68  (v) Export promotion 70 
 (4) M
EASURES AFFECTING PRODUCTION AND TRADE  71 
 (i) Taxation 71 
 (ii) Investment incentives 72 
 (iii) Other forms of production assistance 73  (iv) Trade-related investment measures 74 
 (v) Standards and other technical requirements 74 
 (vi) Price controls 77  (vii) Competition law and consumer protection 78 
 (viii) State-owned entities and privatization 78 
 (ix) Marketing arrangements 82  (x) Intellectual property rights 82 
 (xi) Regulation of corporate practices 83 
IV. TRADE POLICIES BY SECTOR 84 
 (1) I
NTRODUCTION  84 
 (2) A GRICULTURE  86 
 (i) Features 86  (ii) Policy objectives and measures 88 
 (iii) Selected activities 89 
 (3) F
ISHING , FORESTRY , AND MINING  92 
 (i) Fishing 92 
 (ii) Forestry 96 
 (iii) Mining 98 
 (4) E NERGY   99 
 (i) Hydrocarbons 100  (ii) Electricity 101 
 (5) M
ANUFACTURING  103 
  (i) Policy objectives and measures 104 Fiji WT/TPR/S/213 
 Page v 
 
 
     Page 
 (6) S ERVICES  105 
 (i) Features 105 
 (ii) GATS commitments and offers 105  (iii) Banking, finance, and insurance 106 
 (iv) Telecommunications 109 
 (v) Transport 113  (vi) Tourism 117 
REFERENCES   119 
APPENDIX TABLES  127 
 
 
CHARTS 
 
I. ECONOMIC ENVIRONMENT 
 I.1 Product composition of merchandise trade, 2003 and 2007 16 
I.2 Direction of merchandise trade, 2003 and 2007 17 
 III. TRADE POLICIES AND PRACTICES BY MEASURES 
 
III.1 Average applied MFN tariff rates, by HS section, 2003 and 2009 53 III.2 Distribution of MFN tariff rates, 2003 and 2009 54 
III.3 MFN tariff escalation by 2-digit ISIC industry, 2003 and 2009 55 
III.4 Share and averages of bound  tariff lines, by HS section 56 
 
 
TABLES 
 
I. ECONOMIC ENVIRONMENT 
 
I.1 Basic economic and soci al indicators, 2003-08 1 
I.2 Selected macroeconomi c indicators, 2003-08 4 
I.3 Fiscal balance, 2003-07 6 
I.4 Balance of payments, 2003-08 10  
 II. TRADE POLICY REGIME:  FRAMEWORK AND OBJECTIVES 
 
II.1 Main trade-related legislation, November 2008 25 II.2 Main notifications under WTO Agreements, 2000 to November 2008 28 
II.3 FDI reserved and restricted activities, highlighting changes introduced in July 2008 39 
 III. TRADE POLICIES AND PRACTICES BY MEASURES 
 
III.1 Fiji's tariff structure, 1999 and 2003-09 52 III.2 Excise rates, 2007 and 2008 58 
III.3 Prohibited imports, 2008 62 
III.4 Licensed imports, 2008 63 III.5 Exports requiring a licence, 2008 68 
III.6 State-owned entities, November 2008 79 WT/TPR/S/213 Trade Policy Review 
Page vi 
 
 
     Page 
IV. TRADE POLICIES BY SECTOR  
 
IV.1 GDP, by activity, 2001-06 86 IV.2 Major exports, 2002-07 90 
IV.3 Development and status of the tuna industry, 1997-06 95 
  
APPENDIX TABLES 
 
I. ECONOMIC ENVIRONMENT 
 
AI.1 Exchange controls requiring Reserve Bank approval - July 2008 129 AI.2 Trade in services, 2003-07 133 
 
III. TRADE POLICIES AND PRACTICES BY MEASURES  
AIII.1 Main investment incentives, November 2008 135 
 
 Fiji WT/TPR/S/213 
 Page vii 
 
 
 SUMMARY OBSERVATIONS 
 
(1) E CONOMIC ENVIRONMENT  
1. International trade and investment are 
vital to Fiji given its small domestic market, limited natural resources, and inevitable lack 
of economic diversification.  Fiji's narrowly 
based economy faces formidable challenges, which are primarily domestic, but compounded by the recent global recession that is likely to subdue growth of exports and 
inward foreign direct investment (FDI).  
Two coups since 1998, the more recent in December 2006 established the current interim military Government in January 2007, have added to political instability, with adverse economic consequences for an already 
weakening economy.  Elections, initially due 
by March 2009, have been delayed indefinitely pending mainly the introduction of the interim Government's political reforms.  It remains to be seen whether the Government will meet it's 
ear marked date for elections in June 2010 at 
the latest. 
2. Growth has been erratic, and generally 
sluggish, averaging less than 1% annually since 2003.  While GDP growth peaked at 5.5% in 2004, the economy contracted by 6.6% in 2007 as the coup especially hit 
tourism and investment.  Inflation accelerated 
from 4.8% during 2007 to 8.5% in October 2008 (albeit easing from 9.8% in September 2008), due mainly to reversals in rising world oil prices and the "second-round" effect on domestic transportation costs.  
Inflation remains a problem, despite still being 
projected to fall to 7.5% by end 2008.  The strength of the expected modest economic recovery in 2008 has been continually revised downwards, from 2.2% to 1.7% in April to 
1.2% in November 2008.  The "headline" 
budget deficit, reduced to 1.8% in 2007 and 1.5% in 2008, is forecast to rise to 3% in 2009.  
Government total indebtedness remains high, though lower in 2008, at 47.9% of GDP 
(50.3% in 2007).  External debt, at 
US$275.4 million at end 2008 (6.9% of GDP, down from 7.3% in 2007), is relatively small and being mostly concessionary is manageable 
with a low debt service ratio (below 3% of 
exports in 2008).   
3. A substantial and widening gap 
between domestic inve stment and national 
savings resulted in rising trade and current 
account deficits of 25.9% and 17.3% of GDP, 
respectively, in 2007, and 30.0% and 21.0% in 2008.  Monetary policy is mainly directed at curbing external deficits and pressure on foreign reserves, which fell from 
US$958.7 million (4.4 months of import 
cover) at end 2007 to US$860.8 million (3.2 months) at end-October 2008.  Since the coup, discretionary non-market instruments have been used, especially a credit ceiling on individual commercial bank loans of 
F$2,426 million (end-November 2006 level) to 
dampen consumption, and comprehensive exchange controls to limit speculative outflows.  Some were rela xed, most recently in 
September 2008.  Fiji's exchange rate remains 
pegged to a basket of currencies of its 
five major trading partners, based on undisclosed trade weights.  The generally appreciating real exchange rate of the Fijian dollar, until 2008, has undermined Fiji's global competitiveness. 
4. Confronted by economic difficulties, 
Fiji's global ranking as a developing country 
on the UN Human Development Index has slipped from 81
st in 2003 to 92nd (behind 
neighbouring Tonga and Samoa).  Fiji was ranked 50
th among developing countries in 
2005 on the UN Human Poverty Index.  Some 
35% of the overall population are thought to 
live in poverty.  Nominal GDP per capita in 2008, estimated at some F$5,000 (US$3,300), 
is 13% above 2003 levels.  
5. Services are by far the major 
contributor to GDP (72.1 % in 2006), especially community, social, personal and 
household services, wholesale/retail trade, 
transport and communications, and finance, insurance, real estate, and business services.  The share of manufacturing, mainly beverages, tobacco, sugar, and clothing, has generally WT/TPR/S/213 Trade Policy Review 
Page viii 
 
 
 declined (but rose in 2006) to 14.1% of GDP.  
Despite agriculture's contribution to GDP of just 9.8%, mainly involving crops, the sector is vital for subsistence livelihoods, especially in rural areas, where some 50% of Fijians live.  
6. Almost all Fiji's raw materials 
(including fuels), intermediate and capital 
inputs are imported.  Imports as a share of GDP rose since 2003 to 58.9% in 2008 (53.2% in 2007) while the share of exports fell to 24.1% (22.3% in 2007), due to stagnating 
exports from primarily domestic factors (e.g. 
low and declining productivity and thus international competitiveness).  This also reflects reduced export opportunities, especially in clothing to the United States, as due to enhanced preferential access for least-
developed African countries to the U.S. 
market, and global clothing quotas being abolished from January 2005.  Sugar exports to the EC were also affected by sugar reforms and reduced preferential access.  Additionally, 
Fiji has suffered preference erosion from 
multilateral and especially unilateral liberalization, including in clothing exports to its major Australian market, which now 
accounts for over 80%.  
7. Fiji's export markets are now more 
diversified.  Singapore displaced Australia, the 
United States, and the EC as its main 
destination, accounting for 18.6% of merchandise exports in  2007.  Imports are 
almost entirely from Asia Pacific economies.  Singapore, the main source in 2007, accounted for 34.2% of merchandise imports, displacing 
Australia and New Zealand.  Exports are more 
concentrated on primary products (74.1% of total exports in 2007);  the share of agricultural products rose to 50.2%, due mainly to the rise in bottled mineral water offsetting sugar's 
falling share.  Fuel re-exports to visiting ships, 
aircraft, and other South Pacific islands have increased their share considerably to 23.9% in 2007.  The share of manufacturing export fell substantially, to 16.6%, in 2007, due mainly to 
the almost 50% fall in clothing exports in 
2005, which continued to decline to 8% of total exports in 2007.  The import share of primary goods rose substantially to 50% in 
2007, owing mainly to a greater share of fuel imports of 33.2%.  The share of manufactured imports fell substantially to 47.7%.  Fiji 
traditionally runs a surplus on services trade, 
mainly due to significant surpluses on tourism. 
(2) I
NSTITUTIONAL FRAMEWORK  
8. The authorities maintain that the new 
Constitution, which entered into force in 
July 1998, remains Fiji's supreme law.  In the authorities' view, it was effectively legitimized by the High Court decision in October 2008, relying upon the President's prerogative 
powers to ratify the elected Government's 
dismissal and appointment of a caretaker Prime Minister who dissolved Parliament pending fresh elections. This High Court decision is under appeal as some have 
questioned the Constitution's status given the 
nature of the interim Government.  During Parliament's dissolution, legislation is authorized by Presidential promulgations, considered to have equal status to Parliamentary laws.  The National Council for 
Building a Better Fiji has drafted a Peoples' 
Charter for Change, Peace and Progress (to be finalized by 2009) to supplement the 
Constitution. 
9. Fiji's legislative process works slowly, 
and on-going reforms to outdated trade-related 
laws have largely been piecemeal, handicapped by political uncertainty and technical capacity constraints.  The latest 
ministerial restructuring was in 
September 2008.  The Ministry of Foreign Affairs, International Co-operation and Civil Aviation (MFAICCA, formerly the Ministry of Foreign Affairs and External Trade) remains 
responsible for external trade policy.  It 
consults widely in formulating trade policies, mainly through semi-regular meetings of the Cabinet-mandated inter-ministerial Trade and Development Committee (TDC).  No independent body publicly evaluates or 
advises government on trade policies or 
sectoral assistance, to the detriment of public 
accountability and decision-making. Fiji WT/TPR/S/213 
 Page ix 
 
 
 10. The interim Government replaced the 
previous Government's Strategic Development Plan (SDP) 2007-11 in November 2007 with 
the Sustainable Economic and Empowerment 
Development Strategy (SEEDS) 2008-2010.  SEEDS also incorporates the UN Millennium 
Development Goals (MDGs) and equitable 
participation of all ethnic groups in socio-economic development, including a more 
effective Affirmative Action Plan to address 
inequalities faced by indigenous Fijians, along with a short- to medium-term strategy of strengthening governance, raising growth and 
enhancing social and community development.  
11. Trade reforms are seen as integral to 
Fiji's economic priorities of developing an efficient, and therefore competitive, open economy to promote export-led growth.  
Government believes that switching from a 
consumption-driven to an export-driven economy requires removing well-established interventions, such as tariffs and other forms of protection, tax and customs exemptions, and 
incentives.  However, its approach to trade 
liberalization is to be gradual due to revenue concerns, dictated by the pace of internal adjustment of the tax system (in order to meet losses in tariff revenues) and structural reforms to enable non-competitive industries to face 
foreign competition.  While implementation of 
Fiji's 2006 National Export Strategy (NES) stalled in December 2006 the NES Core Team reconvened in September 2008 and six groups 
(agri-business, forestry, marine products, 
mineral water, ICT, and audio-visual) were initially selected for improving Fiji's export performance. 
12. While Fiji is committed to 
multilateralism, it has expanded its network of 
bilateral and regional agreements since its last Review.  The proliferation of such agreements risks creating an excessively complex, and possibly opaque, trade regime that may raise 
the costs of doing business, and divert more 
trade (and investment) than it creates.  Such arrangements include mainly the South-Pacific Regional Trade and Economic Cooperation Agreement (SPARTECA), the Melanesian Spearhead Group Trade Agreement (MSG), 
and the Pacific Island Countries Trade 
Agreement (PICTA).  
13. Substantial empirical evidence casts 
doubt on the economic benefits to Fiji of such discriminatory trade arrangements.  Even a 
trade agreement with Australia and 
New Zealand (Pacific Agreement for Closer Economic Relations, PACER), which seems to offer most promise economically, would more likely provide less benefits to Fiji than 
unilateral non-discriminatory liberalization.  
PACER would also be very ambitious and challenging for Fiji, given its economic development and lack of technical capacities, 
and the adverse revenue implications for Fiji .   
14. The authorities stated that Fiji faced 
"immense" pressure from the EC to sign an 
Economic Partnership Agreement (EPA);  it 
initialled an interim EPA in November 2007.  Fiji's EC trade is subject to a temporary market access extension under the Cotonou Agreement, enforced through EC legislation until end 2008 when the EPA is due to be 
signed.  Otherwise, Fiji's EC market access 
will revert to much less favourable GSP treatment.  EPA negotiations, including those involving other Pacific island States, reconvened in September 2008.  They agreed 
on a "rendezvous clause" requiring the EC to 
commit to labour mobility proposals before negotiations continue.  Fiji is concerned that its EPA tariff reductions will set a precedent for forthcoming PACER negotiations (activated by the EPA), where greater tariff revenue losses are likely.   
15. Fiji accords at least MFN treatment to 
all (including non-WTO) trade partners.  It has no intention of joining the WTO Plurilateral Agreements on Government Procurement or 
Trade in Civil Aircraft.  Fiji does not 
participate in the Working Group on 
Transparency in Government Procurement.  
Nor is it a party to the Ministerial Declaration on Trade in Information Technology Products 
(the Information Technology Agreement).  As 
a small-island developing country, Fiji WT/TPR/S/213 Trade Policy Review 
Page x 
 
 
 supports the interests of the Group on Small 
and Vulnerable Economies (SVEs) and of Like-Minded Economies.  While supporting agricultural liberalization, it feels their 
contributions should reflect capacity 
constraints and vulnerability as well as policy goals and development needs.  An agricultural agreement would have to advance work on key issues (e.g. "underpinning rules and 
disciplines" and avoiding backdoor 
protectionism, through fairer and more predictable trade rules).  Fiji also feels that SVEs and other developing countries should be able to protect infant industries and not have to bind tariffs for highly strategic and 
sensitive products.  It sees an open global 
trading system as vital to reducing poverty, and agricultural trade as a key factor in achieving higher incomes and sustainable 
development.   
16. Fiji has liberalized and rationalized its 
foreign investment regime.  Some activities, 
however, are either reserved wholly for Fijian 
citizens/100% Fijian-owned entities or subject to specified restrictions, especially minimum investment levels.  The latest foreign investment regulations, effective July 2008, 
removed all foreign equity limits, except on 
fishing where the 30% cap was retained;  for example, the 40% foreign equity cap in agriculture was replaced with a minimum cash investment of F$250,000.  A minimum FDI level of F$250,000 was introduced for all 
activities, unless specifically subject to higher 
limits, some of which were raised and extended to cover additional activities, mainly services.  The range of activities reserved for Fijians was seemingly slightly increased.  Fiji 
has no bilateral investment treaties.  It has 
several double taxation agreements, and reached one with Singapore in 2005.  Fiji is negotiating similar bilateral agreements with 
India and the United States. 
17. Fiji has benefited from trade-related 
technical assistance since its last Review.  Its 
resource and capacity constraints limit its 
multilateral responses, including transition from reliance on preferences to an open, and thus more competitive, economy.  Fiji needs 
technical assistance in most areas of trade policy formulation and implementation, including on unilateral, multilateral, and regional initiatives.   
(3) T
RADE POLICY INSTRUMENTS  
18. Since its last Review, Fiji has 
undertaken some trade-related reforms.  The 
tariff remains the principal trade policy 
instrument and an important source of tax revenue.  The Government believes that tariff policy should avoid cascading duties by adopting a low and uniform rate structure, and 
that a permanent restructuring of tariffs and 
taxes to promote economic efficiency and competition would advance Fiji's economic development much more than market-distorting interventions.  Nonetheless, tariffs are still used selectively to protect industries. 
19. Although the tariff structure has been 
simplified, applied MFN tariff rates have 
continuously edged upwards, from an unweighted average of 7.9% in 2003 to 10.4% in 2008, and will reach 11.3% in 2009.  The averages for agricultural and industrial products were 12.0% and 10.1%, respectively, 
in 2008 (12.7% and 11.1% in 2009).  This 
upward trend seemingly contradicts the Government's stated goal of gradual tariff reductions to achieve a lower more uniform 
rate structure. 
20. There are four tariff rate bands, 0%, 
5%, 15%, and 27%;  the latter top rate was 
increased to 32% for 2009.  The modal rate is 
5%, and some 30% of tariff lines in 2008 (and 2009) had rates of 15% or above.  Tariff disparities, narrowing up to, and especially in, 2008, will widen in 2009 (standard deviation 
rising 8.8 to 10.6 percentage points).  Tariff 
escalation is significant and will rise in 2009.  Nearly all tariff lines have ad valorem  rates, 
thereby contributing to the tariff's transparency.  Non- ad valorem  rates, mainly 
alternate rates with minimum ad valorem  
duties of 27% in 2008 (raised to 32% in 2009) 
apply mainly to used motor vehicles, clothing, alcoholic beverages, tobacco, and steel Fiji WT/TPR/S/213 
 Page xi 
 
 
 products;  such rates tend to conceal relatively 
high ad valorem  equivalents.   
21. Additional de facto  tariffs, the separate 
so-called "import excise taxes" levied since 2006, only on imports (unlike excise taxes, which are applied to certain imported and 
domestically produced "sin" goods) covered 
9.8% of tariff items in 2008.  Including these rates raises the average unweighted MFN tariff in 2008 to 11.4% (12.4% in 2009) and widens 
dispersion. 
22. Fiji has bound almost 50% of its tariff 
lines, mainly in agriculture.  The average 
applied MFN tariff rate is well below bound 
rates (averaging 40.2%).  This gap creates uncertainty and provides scope, used during the review period, for Fiji to raise tariffs within WTO commitments.  Applied rates also 
still exceed bound rates on some items, 
possibly accentuated by "import excise taxes".   
23. Fiji has improved its customs 
operations, and adopted the transaction value.  Allegations that obstacles to imports remain are rejected by the authorities.  These alleged obstacles include:  lack of impartial application of laws, re gulations, and judicial 
decisions;  no effective formal private sector 
consultation mechanism or effective advance ruling system; excessive and time-consuming documentation requirements; unreasonable fees and charges; and bribery and other corrupt 
practices, including payments to expedite 
import clearance.  Fiji is not a member of the Kyoto Convention, but is considering joining as part of its participation in the WCO's Columbus Programme, and plans to fully adopt international customs standards by 2012. 
24. Extensive non-transparent tariff 
concessions include exemptions and end-use 
arrangements assisting certain producers.  Administration of duty drawback and suspension schemes for exporters is reportedly complex and difficult to utilize.  Such imperfect schemes are needed to prevent high 
tariffs on raw materials and intermediate 
inputs from penalizing exporters.  Discriminatory excise taxes apply to imported tobacco products and a recently introduced 
50% local-content scheme encourages use of domestic leaf.  The value-added tax (reasonably effective in replacing revenues 
lost from previous tariff reductions) does not 
seem to discriminate against imports. 
25. A number of import prohibitions, 
restrictions, and licensing requirements for health, security, and moral reasons remain in place.  Imports of used motor vehicles older than four years (increased to eight years for 
2009) and plastic bags we re prohibited in late 
2007.  Fiji has taken no anti-dumping or countervailing action during the review period, 
and has no safeguards legislation.   
26. Despite efforts to improve public 
procurement, new legislation was suspended in December 2006.  Regulations remain time-consuming and bid-rigging/collusion exists.   
27. Fiji's few standards and technical 
regulations have mostly been adopted from 
Australia and New Zealand.  Revised food safety regulations were implemented in 2003.  Fiji has no drug registration process, and pharmaceutical importers are licensed wholesalers.  Drugs must meet British or American standards. 
28. Exports are controlled by an extensive 
export licensing system.  To promote domestic downstream processing and thus value-added, export taxes of 3% apply to sugar, molasses, gold, silver and, from 2009, unprocessed fish and timber (round logs are already banned).  
There are administrative difficulties, including 
delays, in the provision of VAT refunds on inputs used in exports.  Export incentives, involving 50% income tax exemptions, were 
recently extended for two years.   
29. Other extensive tax incentives, also of 
dubious economic merit, are intended to 
encourage investment, often targeting priority 
sectors (e.g. tourism and audio-visual industry), and are sometimes subject to minimum local-content or export requirements.  These, including widespread 
generous tax holidays, were recently extended, WT/TPR/S/213 Trade Policy Review 
Page xii 
 
 
 and a new tourism package will replace the 
scheme that terminates at the end of 2008.  The Reserve Bank provides concessionary 
export finance.   
30. Fiji has extensive price controls on 
basic food items (pharmaceuticals, fuel, steel, 
cement, and cigarettes) and services (e.g. rent, 
education fees, and telecom charges).  Its consumer protection and competition law, the Fair Trading Decree 1992, was amended extensively in 1998.  The Commerce 
Commission administers the legislation's 
competition provisions while the Department of Fair Trading and Consumer Affairs handles consumer protection.  Under its competition policy, adopted in late 2004, the Government intends to encourage efficiency by enforcing more competitive and contestable markets.    
31. There are several statutory agricultural 
marketing arrangements.  Sugar production and marketing is regulated.  Government has accumulated sizeable contingent liabilities from supporting state-owned enterprises, for example, via loans and standing debt 
guarantees.  Government now charges fees of 
up to 2% on debt guarantees.  Privatization has been slow;  it is seemingly a low government priority seen principally as a source of revenue rather than a means of improving economic efficiency.  
32. Although Fiji has not joined any more 
WIPO treaties since 1998, it has amended its 
copyright and patent laws.  Copyright enforcement seems weak, and the legality of parallel imports, while seemingly allowed, is 
unclear.  
(4) S
ECTORAL TRADE POLICIES  
33. While Fiji has made sectoral reforms 
since its last Review, significant impediments remain to the efficient allocation of resources 
(such as government intervention, 
state-ownership, public and private monopolies, and a general lack of competition), and thus to international competitiveness.  Further market-opening and 
deregulatory measures in key sectors would facilitate adjustment toward a more diversified 
and efficient economy. 
34. Government sees agriculture as 
fundamental to reviving the economy and promoting food security through self-sufficiency (e.g. in rice and milk).  Import 
substitution policies include relatively 
moderate to high tariffs  on foodstuffs.  Sugar 
growing and production is inefficient and protected by relatively high MFN tariffs of 27% (32% in 2009), with the majority 
state-owned monopoly processor, the Fiji 
Sugar Corporation, the only licensed importer.  The Corporation makes losses despite being subsidized (e.g. through grants and guaranteed loans) and receiving guaranteed high prices on quota exports to the EC (and United States).  
Faced with the phasing out of EC sugar 
preferences and lower export prices, Fiji is attempting to enhance the industry’s competitiveness to compete more in these and other possible emerging export markets, 
including reforms intended to arrest declining 
production by improving efficiency in growing, processing, marketing, and transportation, including upgrading of mills.  The State is indirectly involved in rice, food processing, and dairying.  
35. Fishing and forestry are important 
components of the Government's affirmative 
action plan to boost opportunities for indigenous Fijians.  Fishing policies, especially for tuna, are intended to promote the industry's indigenization and sustainable management by setting catch quotas based on 
sustainable yields rather  than relying only on 
limiting vessel numbers;  current catches are well below assessed sustainable levels.  Fish caught in Fijian waters must be landed in Fiji using long lining (unless caught under the U.S. 
Treaty).  Fishing licences are allocated 
preferentially based on Fijian ownership, amount of investment in onshore facilities, export potential, and local content;  indigenous Fijians have priority.  Fijian-registered foreign 
boats must be Fijian owned (Fijian 
incorporated firm with at least 30% local 
equity).   Fiji WT/TPR/S/213 
 Page xiii 
 
 
 36. Strict rules of origin on fish exports to 
the EC have severely restricted opportunities, and while relaxed under the EPA, such benefits have been lost by the EC's decision to 
prohibit all Fijian fish exports on SPS grounds 
in May 2008.  A new forestry policy adopted in 2007 aims to expand sustainable management.  The stat e/landowner-owned Fiji 
Pine Ltd grows and markets pine while the 
state-owned monopoly, Fiji Hardwood 
Corporation, handles planted hardwood (mahogany) plantations.  Both sectors may suffer from over-exploitation, and receive generous tax and other financial incentives;  
these have been improved for fishing in 2009. 
37. Fiji's manufacturing policy goals are 
to diversify and expand the sector by 
developing competitive, high value-added 
industries, including by divesting public enterprises and reviewing tariffs annually to promote competitiveness.  In addition to tariffs, Fiji assists manufacturing using 
extensive tax and other incentives to 
encourage investment and/or manufacturing exports, especially in rural areas.  The largely foreign-owned clothing industry has contracted substantially.  At least one major 
Fijian firm has relocated to Africa, and the 
largest (and only Fijian seller to the United States), a Singaporean company, which accounted for half of Fiji's clothing exports, closed in 2005 soon after global quotas were 
abolished.   
38. State involvement exists in services 
(especially in transport and communications). 
Road transport is regulated by permits.  
Five-yearly permits apply to bus routes and freight carriers.  An indefinite freeze on new permits introduced in July 2006 was lifted in January 2008.  A 10% subsidy was recently 
introduced for bus operators.  Coastal/inter-
island routes are licensed using an economic needs test, and cabotage is prohibited.  A Sea Route Licensing System for coastal shipping, to be introduced from 2008, has been delayed 
but if introduced may further reduce 
competition.  Government fully subsidizes servicing of non-profitable routes by financing private operators through tender.  Significant 
port reforms include placing the main ports under the management of the state-owned Fiji Ports Corporation Ltd,  and having the 
Commerce Commission review its charges.  
The state-owned stevedoring monopolist, Ports Terminal Ltd, is to be privatized after gradually introducing competition.  Government is seeking a strategic partner for 
the loss-making minority-state-owned Fiji 
Ships and Heavy Industries.  Fiji has not joined the Pacific Islands Air Services Agreement designed to form a single Pacific aviation market.  A cabinet task force is reviewing the national airline, Air Pacific 
(51% government-owned).  The state-owned 
Airports Fiji Ltd manages international airports and the 51% government-owned Air Terminal Services Fiji Ltd is the only provider of ground-handling services at Nadi International Airport. 
39. Banking and insurance is relatively 
open;  foreign branches and subsidiaries are 
allowed.  Insurance has no state involvement and such ownership in commercial banking ceased in early 2006.  The supervisory and regulatory framework for banking and 
insurance is being strengthened in line with 
international best practices (e.g. supervisory guidelines of the Bank for International Settlements and developments in the global financial sphere).  The Capital Markets Development Authority supervises Fiji's underdeveloped capital market. 
40. Fiji's telecommunications market was 
fully deregulated in January 2008 
(Telecommunications Promulgation), thereby ending the monopolies on domestic, international and mobile services previously protected until 2014 by a 25-year exclusivity 
licence.  State ownership remains substantial, 
with 49% in Telecom Fiji Ltd (51% owned by the Fiji National Provident Fund), 51% in Fiji International Telecommunications Ltd, and 51% in Vodafone Fiji.  A new mobile operator 
commenced operations in October 2008.  An 
independent regulator, the Telecommunications Authority of Fiji, is being WT/TPR/S/213 Trade Policy Review 
Page xiv 
 
 
 established.  It will administer an open 
licensing system based on unrestricted licence numbers and automatic issuance if requirements are met (excluding mobiles).  
The Commerce Commission regulates retail 
non-mobile prices, which cross-subsidize domestic calls through excessive international and mobile charges, and other matters (e.g. access and interconnection, misuse of market 
power and consumer protection).  The IT and 
audio-visual sectors receive substantial tax concessions, to be increased from 2009.  Fiji Television Ltd's exclusive licence on providing free-to-air channel and terrestrial-based pay television ended in 2004, and 
four new licences were tendered conditional 
on greater local content (50% by 2015).  Media cross-ownership is subject to restrictions (e.g. on licences and foreign 
control and ownership). 
41. Reform of the loss-making state-
owned Fiji Electricity Authority was reversed 
in 1999 when structura lly separated companies 
were reconsolidated in to the Authority at 
substantial cost.  It is both the regulator and major power supplier.  While the Commerce Commission reviews prices, they are 
government-influenced, set below cost 
recovery and include cross-subsidies.  In 2006, cabinet endorsed the creation of an independent mega-regulator covering electricity, communications, and water.  Tourism, which suffers from political 
developments, receives generous tax 
concessions involving investment allowances and tax holidays;  a new incentives package 
will replace the current scheme from 2009.   
(5) T
RADE POLICY AND TRADING 
 P ARTNERS  
42. The Fijian economy faces numerous 
macroeconomic and structural challenges.  Macroeconomic stability revolves around 
continued fiscal discipline and prudent 
monetary policy to curb inflation and address external imbalances, the source of foreign reserve pressures.  Attracting greater FDI will also be important for economic prosperity.  The speed at which the economy recovers will 
hinge on the Government's ability to meet these economic challenges, including re-structuring of the economy to improve 
productivity and thus international 
competitiveness, especially given the pressures confronting clothing, tourism, and sugar exports following domestic and external developments.  Turning the economy and 
these sectors around will generally require 
boosting overseas confidence that the Government is committed to economic reforms, including on trade and foreign investment, and to ensuring greater political 
stability.  
43. Fiji's economic recovery is likely to be 
slow, and will also depend on international 
developments, notably the global recession 
following the recent financial crisis.  The 2009 Budget projections for higher growth seem ambitious given intern ational developments 
(2.4% in 2009, 1.9% in 2010 and 1.5% in 
2011), and, by not fully reflecting the effects 
on Fiji of the world economic crisis, have substantial downside risks.  Year-end inflation is forecast at 4.5% for 2009 and 2010, and the current account deficit at 21.3% and 18.4% of GDP, respectively, falling to 15.3% in 2011. 
44. WTO Members can help Fiji by 
further, non-discriminatory liberalization of 
their markets, including alleviating unduly restrictive non-tariff barriers (e.g. sanitary and phytosanitary measures) that impede Fijian exports.  Members might also wish to consider measures to minimize the adverse impact on 
Fiji's trade patterns of their more generous 
preferential access to exports from least developed countries.  Since these preferential arrangements are intended to encourage trade with least developed economies to improve 
their trading opportunities, they may have also 
unintentionally diverted trade and foreign investment away from important Fijian industries, such as clothing and sugar;  exports of these products from least developed 
countries have expande d substantially to 
developed countries offering such preferences.